Rent vs Buy Calculator
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Quick Summary
- Compare the true long-term cost of renting vs buying a home in India: EMI, property appreciation and the opportunity cost of your down payment.
- For example, Rent ₹25,000/mo vs buy ₹80 lakh home, 20% down works out to Compares 15-year net worth under both paths.
- Built for renters in India deciding whether buying a home makes more financial sense than continuing to rent
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Your Scenario
Verdict over 20 years
🏠 Net Cost of Buying
₹0
(EMI paid − property value)
🏢 Net Cost of Renting
₹0
(rent paid − investment gains)
Break-even at year —
How this is calculated
Buy: total EMI paid − appreciated property value. Rent: total rent paid (growing 5%/yr) − returns on down payment invested in mutual funds at the return rate you set.
How the Rent vs Buy Calculator Works
The calculator projects total cost over your holding period for both paths: renting (rent + escalation + investing the down payment you save) versus buying (EMI + taxes + maintenance + property appreciation), then compares final net worth under each scenario.
Example Scenarios
| Scenario | Result |
|---|---|
| Rent ₹25,000/mo vs buy ₹80 lakh home, 20% down | Compares 15-year net worth under both paths |
| Price-to-rent ratio above 25x | Renting + investing the difference often wins |
| Price-to-rent ratio below 15x | Buying is usually more cost-effective |
* Illustrative estimates assuming constant annual returns. Actual results vary with market conditions.
Frequently Asked Questions
It depends on the price-to-rent ratio in your city, how long you plan to stay, and the opportunity cost of the down payment. If the price-to-rent ratio is above 20-25x, renting and investing the difference often works out better financially over the medium term.
Include home loan EMI, property taxes, maintenance and repairs, and stamp duty/registration for buying; and rent plus annual rent escalation for renting. Also factor in the opportunity cost of investing the down payment amount instead of using it for a home.
Not necessarily — Indian residential property has historically appreciated around 5-8% annually in most cities, which is often lower than what a down payment could earn if invested in equity mutual funds (10-12% CAGR). Buying makes more sense when there's also lifestyle/stability value, not purely investment return.
Common Mistakes to Avoid
- Comparing only EMI to rent, while ignoring property tax, maintenance, and stamp duty on the buy side.
- Assuming property will always appreciate 8-10% annually — most Indian cities have historically seen 5-8%.
- Not accounting for the opportunity cost of the down payment if it were invested instead.
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* Calculations assume constant annual returns. Actual mutual fund returns vary. Past performance is not indicative of future results. FD comparison uses 7% p.a. SIP returns are compounded monthly.
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